How To Conduct an Internal Audit in The Best Possible Ways?

In some cases, an internal audit is treated like a lifesaver that can and will fix everything. The growing interest in internal audit is driven by several factors.

First, it is one of the few currently available and at the same time underestimated resources, the correct use of which can increase the efficiency of the company.

Secondly, the presence of good corporate governance in the company, one of the links of which is internal audit, increases the investment attractiveness of the company.

Internal audit is the activity of providing independent and objective assurance and advice aimed at improving the organization's performance.

Internal audit helps the organization to achieve its goals using a systematic and consistent approach to assess and improve the efficiency of risk management, control, and corporate governance processes.

First, the profession of an internal auditor itself is based on two fundamental qualities - independence and objectivity. Independence in this case is an organizational concept and is largely determined by the level of subordination of the internal audit service in the company. (Read More: Know Whether Your Company Follows Financial Standards With A Company Audit)

Objectivity refers to the individual quality of an internal auditor, which is how impartial he is in his assessments and conclusions.

The purpose of an internal audit, as follows from the definition, is to improve the performance of an organization.

We emphasize- not to reveal violations and errors for subsequent organizational conclusions and punishment of the guilty, not to write a report of several tens of pages, but to see and assess the risks, weaknesses in the work of the organization and give recommendations for improving and increasing the efficiency of internal processes.

With the increase in the number of information systems in companies, it becomes possible to obtain more different data, analyse it and look for relationships between them.

To do this, instead of the previous spreadsheets, data processing, and visualization programs have appeared in the tools of internal auditors.

They allow not only to process the entire data sample, but also to analyse deviations from certain norms and other operations. All this makes it easier to conduct audit tests and increases the reliability of their results.

Internal audit now requires more than just a statement of facts and a retrospective view of the situation. To stay relevant and to keep up with general trends, the activities of internal auditors must benefit the organization, for example, with recommendations aimed at improving business performance.

Auditors, unlike other employees, can rise above the situation, draw on their knowledge and experience gained on other projects.

This allows them to carry out internal audit consulting services at a high level. And the implementation of recommendations following the results of such projects gives companies added value.

It is no secret that the tasks and challenges specified in the article require new knowledge and competencies from internal auditors.

This is not about all internal audit staff having to be masters at everything. Rather, it is necessary to create centres of excellence for them, with the help of which examiners can constantly exchange experience and knowledge.

Another way is to attract experts from business units during audit projects, or, if there is a budget, internal auditing consulting services.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates